Asset Protection For Out-Of-State Rentals

Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes

This strategy enriches the lawyers creating you LLCs. I bet they have offered, for a fee, to help you manage all the paperwork you will need to file every year to properly maintain the entities, right?

Do you really need all this, or wold simply having good liability insurance meet your needs?

Oh, did anyone explain that if you want completely avoid having anything in your name, buying entirely in your LLC, that you also cannot get conventional mortgages? In other words, you will pay to form the LLC, pay to keep it legit, and pay higher interest because you are buying in an LLC.

Unfortunately, there is no "perfect" solution. You will need to decide the cost / benefit of each action, just fully understand the cost and benefit of each decision.

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Remington LymanBusiness Member

Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes

5y

Originally posted by @Lucy Huang:

HI! I am a new investor in California looking to buy out-of- state rentals in Ohio. I was told for the best asset protection to have each rental property under an Ohio LLC and to have Wyoming as the holding company. I would be listed as the manager member of the Wyoming Holding Company. For the Ohio LLC, I would be listed as the manager and the Wyoming holding company would be listed as the member. I was also told to have separate bank accounts for my Ohio LLC and the Wyoming LLC.

1. Do I have to file taxes on my Wyoming Holding company?

2. Since I'm techically doing business in California, I know I have to file my Ohio LLC as a foreign LLC. Do I Have to file the Wyoming company as a foreign company as well in California?

3. Since I'm the only member in the Wyoming Holding company, do I have to make it a multi-member LLC for better asset protection. I heard single member LLCs don't have as much asset protection. Wouldt the Ohio LLC be considered a multi-member LLC since it has both me and the Wyoming LLC listed as members?

I have a few attorneys that I can refer to you in Ohio. They should be able to help you out with this!

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Rhonda Willock

Real Estate Broker · Vacaville, CA · Member since 2017 · 12 posts · 4 votes

4y

Hi Lucy,

I know this was posted a while ago but I was wondering how things went with your purchase and what you decided to do with the LLC.

We live in California and are looking at a property in Florida. Each attorney and CPA I ask has a different opinion on how best to do this. Some swear by a Wyoming LLC as a holding company with an LLC also in the state we buy in, some say no way, get an LLC only in the state you live while others say the LLC should be set up in the state you purchase the investment property in.

Asset Protection For Out-Of-State Rentals

Asset Protection For Out-Of-State Rentals

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